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Costco Wholesale Corporation Reports August and Fiscal Year-end Sales Results; Comments On Earnings Estimates for Fiscal Year 1999, Including Plans to Record a $50 Million Pretax Warehouse Closing Costs Charge in the Company's Fourth Quarter
ISSAQUAH, Wash.--(BUSINESS WIRE)--Sept. 2, 1999--
Costco Wholesale Corporation, formerly Costco Companies, Inc., (the "Company") (Nasdaq:COST) today reported net sales of $2.19 billion for the four weeks ended August 29, 1999, an increase of 16 percent from $1.88 billion in the same four-week period of the prior fiscal year. On a comparable warehouse basis, that is warehouses open at least a year, sales increased 13 percent. These sales results include an increase in the sales of tobacco in the final week of the four-week reporting period, due to a price increase announced by the major tobacco companies, which benefited sales by approximately one percent.
For the fiscal year ended August 29, 1999, the Company reported
net sales of $26.98 billion, an increase of 13 percent from $23.83
billion during the fiscal year ended August 30, 1998. Comparable
warehouse sales for the fiscal year increased 10 percent over the
prior year's level.
During fiscal 1999, the Company opened 21 new warehouse
locations, including six relocations of existing warehouses to larger
and better-located facilities. Excluding the six relocations, the 15
new openings included the following: 11 in the U.S.; two in Canada;
one in Taiwan and one in Japan. In addition, two new warehouses were
opened in Mexico with the Company's joint venture partner. Expansion
plans for fiscal year 2000 include an estimated 30 to 35 new openings,
including 4 to 6 planned relocations.
The Company will report fourth quarter and fiscal year 1999
operating results, for the fiscal year ended August 29, 1999, on
October 7th. During the fourth quarter, the Company will record a
pretax provision for impaired assets and warehouse closing costs of
$50 million ($30 million, or $.13 per diluted share, after tax).
According to Costco's Chief Financial Officer, Richard Galanti,
"nearly all of the $50 million provision relates to the increased
number of warehouse relocations, including five in this year's fiscal
fourth quarter and up to eight additional relocations through the end
of calendar year 2000. Historically, our investments in relocations
have proven to be one of the more attractive uses of Company capital,
and have contributed to the Company's strong comparable sales
In terms of the Company's earnings outlook for the fourth quarter
and fiscal year ended August 29th, Galanti stated that, "Excluding the
$.13 per share impact of the closing costs described above, the
Company expects to be in line with the current average published
consensus estimate of $.76 per share for the fourth quarter and $2.34
per share for the fiscal year just ended".
The Company also announced that it has changed its name to Costco
Wholesale Corporation and completed its re-incorporation from Delaware
to Washington. Costco Wholesale Corporation's common stock will
continue to trade on NASDAQ under the current symbol, "COST".
Costco currently operates 292 warehouses, including 221 in the
United States, 58 in Canada, seven in the United Kingdom, three in
Korea, two in Taiwan, and a warehouse in Japan; as well as 16
additional warehouses in Mexico with a joint venture partner. The
Company also operates Costco Online, an electronic commerce web site,
Certain statements contained in this news release constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. For these purposes,
forward-looking statements are statements that include words such as
"plans," "intends," "expects," "anticipates," "believes," "estimates"
or similar expressions. Such forward-looking statements involve risks
and uncertainties that may cause actual events, results or performance
to differ materially from those indicated by such statements. These
risks and uncertainties include, but are not limited to, domestic and
international economic conditions, the effects of competition and
regulation, conditions affecting the acquisition, development and
ownership or use of real estate, actions of vendors, and the risks
identified from time to time in the Company's reports filed with the
--30--APS/se* CONTACT: Costco Companies, Inc. Richard Galanti, 425/313-8203 Bob Nelson, 425/313-8255 KEYWORD: WASHINGTON INDUSTRY KEYWORD: RETAIL EARNINGS